Contractors or Employees? Which do you choose and why?

[Joshua D.]

So, at the moment, I have 11 units. I aquire new houses and do remodels year round. We typically do 2-3 remodels a year. Right now, I hire 2 full-time employees to do the remodeling work for me, and they do maintenance calls, as needed. I pay them, on payroll, $11/hour.  We give them $25 in cash for any maintenance call they do, after hours. Our accountant charges us around $2,000/year to do payroll, and we pay $1,800/year for workers comp insurance. We obviously have taxes, etc that also comes out of it. 

So, I'd say it's a good guesstimate that we pay $44,000/year for our 2 employees, including everything that comes along with having them (payroll, workers comp, etc.) This numner is STRICTLY employees only, not for materials for the remodels, etc. 

But with us doing 2-3 remodels a year at a minimum (and this doesn't include the smaller jobs, such as finishing attics and improvement projects on the rentals, which we also do year-round), and having 11 full time rentals, in which the employees take care of, does this make sense? 

We'd also, I suppose, have the option of paying a licensed/insured contractor by the job to do it, and just having a few guys to call for maintenance calls, therefore eliminating our payroll entirely as well as our workers comp costs, etc. 

 However, contractors are substantially more expensive and would charge atleast 3x what it costs us to do the remodels, now.

Just looking for your thoughts. Thank you!

[Bryan Blankenship]

@Joshua D. ,I should have been more clear.  

My entire operation does 15-20+ per month for Flips, Turnkey, Multi-Family, etc.

Out of those that we buy and sell, we only keep 3-5 of them each month for our own portfolio.

But as for how we do 15-20+, just an amazing team LOL. It's all about the team. I used to do triple this amount of rehabs for my REO clients with only a 4-5 person team and the same field contractors.

The answer is making the field contractors 100% responsible for everything instead of hiring dozens in your office.